Committee approves, yet doesn’t endorse, casino expansion bills

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A rendering of the proposed casino in East Windsor.

Proposals to expand casino gambling in Connecticut cleared the Public Safety and Security Committee on Wednesday in votes signifying a consensus that the bills were too big to die in committee, not a measure of the support for opening the state to commercial casinos off tribal tribal lands.

“It signifies how important this issue is, but it also highlights how divided the legislators are on this very important issue,” said Rep. Joseph Verrengia, D-West Hartford, co-chair of the committee. “That’s why the conversation needs to continue.”

Verrengia said he saw no consensus for competing Senate and House bills or the third option of doing nothing. The Senate bill would grant exclusive expansion rights to the state’s two federally recognized tribes, the Mashantucket Pequot and Mohegan tribal nations. The House bill would create a competition in 2018.

The tribes, owners of Foxwoods and Mohegan Sun, two of the world’s largest gambling resorts, want authorization to jointly develop a satellite casino in East Windsor to compete with the MGM Resorts International casino scheduled to open in Springfield in 2018.

A House bill favored by Verrengia would create an open competitive process to seek requests for proposals to open casinos elsewhere in the state, a measure widely interpreted as testing the interest in establishing a major gambling resort in lower Fairfield County to tap into the New York City market. It passed, 21-4.

MGM has fought the East Windsor bill, saying a no-bid process was illegal and left the state unable to strike the best deal for revenue sharing. It passed, 20-5.

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Sen. Tim Larson and Rep. Joe Verrengia

The tribes currently have an exclusivity deal in which they pay 25 percent of gross slots revenue so long as the state does not allow slots or table games off their tribal lands.

An open question Wednesday was where the conversation about expanding casino gambling would continue in the General Assembly?

Verrengia and Sen. Tim Larson, D-East Hartford, a co-chair, said Gov. Dannel P. Malloy and the legislative leadership now must decide if they want to tackle the issue, or let one or both bills die from inaction. Larson said they need to “figure out, for lack of a better word, what their appetite is and which direction they should be going in.”

The tribes’ revenue sharing with the state reached a high of $430 million in 2007, the year before the great recession, fell to $262 million last year and is projected to shrink further in the face of growing competition in Massachusetts, Rhode Island and New York.

They say their proposal to jointly develop a casino at the site of a vacant Showcase Cinema off I-91 in East Windsor, not far from the state line and Springfield, is intended to blunt the loss of market share.

“They reached out to us and said, ‘Help us put a tourniquet on this bleeding.’ I think our committee has done that,” Larson said. “I think we’ll leave it up to leadership to figure out which direction the state of Connecticut should be going.”

“There are more than 9,000 jobs and millions in tax revenue at stake for the state,” said Rodney Butler, chairman of the Mashantucket Pequot tribal nation. “Today’s vote takes us one step closer to keeping both right here in Connecticut.”

On Monday, Attorney General George Jepsen delivered a formal opinion warning that allowing the tribes to jointly operate a casino off tribal lands would pose legal risks that “are not insubstantial” to the slots revenue annually shared with the state.

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Rep. Daniel S. Rovero, a no vote on both bills.

The eight-page analysis offered little reassurance to lawmakers who backed away from casino expansion in 2015 after Jepsen’s office first flagged the risks and complications of allowing the Pequots and Mohegans to develop the state’s first commercial casino without an open-bid process.

Rep. Daniel S. Rovero, D-Killingly, one of the committee members who opposed both bills, said Wednesday the attorney general’s opinion was sufficient reason to kill casino expansion without further debate or consideration by the full General Assembly. He called risking the current revenue sharing a bad gamble.

“I don’t want to take that chance,” Rovero said. “If I did, I should be at the casinos more often.”

Sen. Tony Guglielmo, R-Stafford, a co-chair, voted for both bills, but cast doubt he would back either if they came to a floor vote in the Senate. He said, “I just don’t think we need a third casino.”

MGM praised the committee for approving the competition bill, ignoring the East Windsor measure.

“The committee’s approval of the competitive bill reflects the realization that it offers Connecticut the best way to achieve the greatest reward with the least risk,” said Uri Clinton, a senior vice president. “A market-driven competitive bidding process is how Connecticut generates more revenue, creates more jobs, and drives greater economic development. And an open, transparent, competitive process removes the significant risks outlined by the attorney general that are inherent in a no-bid, non-competitive award that could jeopardize revenue streams critical to state and municipal budgets.”

Kevin Brown, the Mohegan tribal council chairman, said a competitive process in 2018 might yield nothing.

“Many people are promising many things this year,” Brown said. “What we are promising is real — it’s founded on an actual track record of partnership with both the state and every city and town in Connecticut, one we hope to continue in good standing for generations to come. We thank the committee for their vote today.”